Is There Hedge Fund Contagion?

We examine whether hedge funds experience contagion. First, we consider whether extreme movements in equity, fixed income, and currency markets are contagious to hedge funds. Second, we investigate whether extreme adverse returns in one hedge fund style are contagious to other hedge fund styles. To conduct this examination, we estimate binomial and multinomial logit models of contagion using daily returns on hedge fund style indices as well as monthly returns on indices with a longer history. Our main finding is that there is no evidence of contagion from equity, fixed income, and foreign exchange markets to hedge funds, except for weak evidence of contagion for one single daily hedge fund style index. By contrast, we find strong evidence of contagion across hedge fund styles, so that hedge fund styles tend to have poor coincident returns.

The use and role of indigenous knowledge in small-scale agricultural systems in Africa: the case of farmers in northern Malawi

This thesis examines the role and use of indigenous knowledge within small-scale agricultural systems in Africa and its relevance in development practice and theory. Using development programmes that have been implemented in the study area from the colonial to the recent times, many of which were largely underpinned by modernisation theory and practice, indigenous knowledge theory and practice is analysed for its role in development processes. The roles of the private sector, NGOs and the government are analysed, based on a chronology of development programmes that were underpinned in many instances by the influences of the major development theories and the subsequent introduction of the structural adjustment programmes by the IMF and the World Bank. Particular emphasis is placed on farmers’ responses to externally induced development programmes, designed by experts for farmers to adopt. In their assessment of these externally driven development programmes, there is a manifestation of the extent of the resilience of local knowledge to its displacement by Western knowledge. Scientifically proven technologies are assessed by farmers for their effectiveness under their farming practices that take into account a range of environmental, socio-cultural and economic factors. Indigenous knowledge is frequently found to be effective in resisting those changes that are undesirable and of little relevance at both farm and community levels. For farmers, knowledge that is useful and of practical use is adopted, or adapted, only when it is assessed, and, in many cases, this is only after trials have been successfully completed. Knowledge that is of little benefit to farmers is discarded irrespective of its type (indigenous or Western), or its source. This study forms the basis for understanding the importance of indigenous knowledge in development practice arising from its existence at farm level and the fact that it is continuously being fined-tuned to suit specific conditions and situations, which are in turn affected by socio-cultural, economic and environmental factors. The findings of this study also show that there are many benefits from using indigenous knowledge in development practice that include the empowerment of local people through their participation in development programmes. Indigenous knowledge is also found to be resilient and beneficial to farmers regardless of income level by reducing their costs of production, to be adaptable to different environmental and economic circumstances, and to provide for a more sustainable use of resources in farming. There is, however, a need for further studies in indigenous knowledge utilisation to enable researchers to keep pace with changes that occur at the local level if development theory and practice are to utilise indigenous knowledge fully and successfully

Activism mergers

Shareholder value creation from hedge fund activism occurs primarily by influencing takeover outcomes for targeted firms. Controlling for selection decisions, activist interventions substantially increase the probability of a takeover offer. Third-party bids for targets have higher returns, premia, and completion rates, but these patterns reverse when the activist is the bidder. Failed bids for activism targets lead to improvements in operating performance, financial policy, and positive long-term abnormal returns, suggesting that activism enhances value. The positive long-term performance from hedge fund activism arises from monitoring target management during merger and acquisition contests and not from target undervaluation or bidder overpayment

The resilience of indigenous knowledge in small-scale African agriculture: key drivers

The successful use of indigenous knowledge (IK) in development practice in rural Africa over the last couple of decades has proved to be elusive and disappointing. Using empirical field data from northern Malawi, this study suggests that the two key drivers for farmers in this area are household food security and the maintenance of soil fertility. Indigenous ways of knowing underpin the agricultural system which has been developed, rather than the adoption of more modern, ‘scientific’ ways, to deliver against these drivers. Such IKs, however, are deeply embedded in the economic, social and cultural environments in which they operate

Hedge funds for retail investors? An examination of hedged mutual funds

Recently there has been a rapid growth in the assets managed by hedged mutual funds - mutual funds mimicking hedge funds strategies. In this paper, we examine the performance of these funds relative to hedge funds and traditional mutual funds. We find that despite their use of similar trading strategies, hedged mutual funds underperform hedge funds. We attribute this evidence to lighter regulation and better incentives faced by hedge funds. In contrast, hedged mutual funds outperform traditional mutual funds. Most interesting, this superior performance is largely driven by managers with experience in implementing hedge fund strategies. Our findings have important implication for investors seeking hedgefund-like payoffs at a lower cost and within the comfort of a regulated environment

Offline estimation of decay time for an optical cavity with a low pass filter cavity model

This Letter presents offline estimation results for the decay-time constant for an experimental Fabry–Perot optical cavity for cavity ring-down spectroscopy (CRDS). The cavity dynamics are modeled in terms of a low pass filter (LPF) with unity DC gain. This model is used by an extended Kalman filter (EKF) along with the recorded light intensity at the output of the cavity in order to estimate the decay-time constant. The estimation results using the LPF cavity model are compared to those obtained using the quadrature model for the cavity presented in previous work by Kallapur et al. The estimation process derived using the LPF model comprises two states as opposed to three states in the quadrature model. When considering the EKF, this means propagating two states and a (2x2) covariance matrix using the LPF model, as opposed to propagating three states and a (3×3) covariance matrix using the quadrature model. This gives the former model a computational advantage over the latter and leads to faster execution times for the corresponding EKF. It is shown in this Letter that the LPF model for the cavity with two filter states is computationally more efficient, converges faster, and is hence a more suitable method than the three-state quadrature model presented in previous work for real-time estimation of the decay-time constant for the cavity

Design of sustainable outsourcing services for facilities management : critical success factors

The management problems of Facilities Management (FM) outsourcing relationships occur because of provision of low quality analytical, managerial, cooperative, and professional services. On selection, the ideal service providers for specific FM outsourcing contractual procurement needs is of paramount importance to achieve high quality FM services. This paper aims at reviewing the concept of outsourcing in relation to facilities management and dealing with the importance of outsourcing success. Factors of outsourcing strategies from the perspectives of clients and service providers are examined and analysed through the Delphi technique in Hong Kong. The results reveal four main drivers of FM practice through evaluation of thirty-five outsourcing critical success factors identified by clients and service providers. Evaluation of the critical success factors from FM drivers shows that there is an inclination towards FM competence, measurement of performance, cost effectiveness, etc. from clients, whilst there is an inclination to the core skills, measurement of performance, allocation of human resources, cost effectiveness, customers’ satisfaction, etc. from service providers. The result of the study reveals an interesting understanding that the impact of outsourcing critical success factors can be strategically implemented into the outsourcing strategies in Hong Kong’s FM practice

Hedge Fund Contagion and Liquidity

Using hedge fund indices representing eight different styles, we find strong evidence of contagion within the hedge fund sector: controlling for a number of risk factors, the average probability that a hedge fund style index has extreme poor performance (lower 10% tail) increases from 2% to 21% as the number of other hedge fund style indices with extreme poor performance increases from zero to seven. We investigate how changes in funding and asset liquidity intensify this contagion, and find that the likelihood of contagion is high when prime brokerage firms have poor performance (which would be expected to affect hedge fund funding liquidity adversely) and when stock market liquidity (a proxy for asset liquidity) is low. Finally, we examine whether extreme poor performance in the stock, bond, and currency markets is more likely when contagion in the hedge fund sector is high. We find no evidence that contagion in the hedge fund sector is associated with extreme poor performance in the stock and bond markets, but find significant evidence that performance in the currency market is worse when hedge fund contagion is high, consistent with the effects of an unwinding of carry trades.